The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

BAHAMIANS have been warned that the drive towards affordable, quality healthcare for all will "stagnate" if they do not back the Government's revised National Health Insurance model.

Dr Duane Sands, minister of health, told Tribune Business it would be "a tragedy" if the Bahamian public did not support the restructured initiative and its proposed two percent payroll levy funding mechanism.

Revealing that he would be "very surprised" if there was a better alternative, Dr Sands said the Government would face two options if its latest proposal was rejected - either close down the National Health Insurance (NHI) scheme and the authority, or "continue as is" with the present limited service that "is not Universal Health Coverage (UHC) in the purest sense".

He argued that neither alternative was viable given "the enormity of the health challenge" that The Bahamas faces through the widespread penetration of non-communicable diseases (NCDs), such as diabetes and hypertension, and the inability of many to afford essential treatments and care.

Describing the healthcare "status quo" as untenable, Dr Sands reiterated that Bahamians must get used to paying for services they value especially given the Government's own financial limitations.

Again accusing the former Christie administration of promising "something magical for nothing" just prior to the 2017 general election, the Minister warned that developing NHI as "another unfunded entitlement programme" would send "a bright red flag" to Moody's and Standard & Poor's (S&P), the latter of which has already downgraded The Bahamas' creditworthiness to "junk".

The Government's release of its revamped NHI model kick-starts a 45-day public consultation on the proposal, which it wants to start implementing as early as April-July 2019. NHI has been chosen as the financing mechanism to achieve Universal Health Coverage (UHC), which is the goal of ensuring all Bahamians have access to affordable, quality healthcare when they need it.

"Once this conversation is done, either people are going to say 'yes' or 'no'," Dr Sands told Tribune Business. "If the answer is 'no', for the most part The Bahamas' march to Universal Health Coverage will stagnate and that will be a tragedy.

"We can continue to fund, to the extent of the strength of the public purse, NHI out of the Consolidated Fund. "But it would be NHI in name only, primary care only at the level provided. So far, we have 40,000 people insured, which works out to around 10.5 percent of the population. Is that really NHI in the purest sense of the term?"

Dr Sands said the existing NHI scheme, "depending on the appetite of the public", might take another 20 years "to impact the health profile of the country" - a development he described as too little, too late, given the magnitude of The Bahamas' health crisis and struggle with non-communicable diseases (NCDs).

Besides maintaining the current NHI system as is, Dr Sands said other alternatives were to dismantle the NHI Authority and the scheme entirely, or adopt a different funding mechanism should one be suggested during the upcoming consultation.

"If somebody comes up with an idea of funding this thing in a more palatable way, we don't have a problem taking it on," the Minister said. "I'd be very surprised if they did come up with a different approach that's similarly reasonable given the fundamentals of our economy.

"I believe that when we look at the risk of a [sovereign credit rating] downgrade again, if we were to create another unfunded entitlement programme in this country, that would be an horrendously bright red flag that says we're deviating from the concept of fiscal responsibility.

"We've been at this a long time. Just discussing NHI in this era so far has been 12 years. The [first Christie administration's] Blue Ribbon Commission was in 2006, but here we are 12 years later haggling, having major complications over something we all agree we want; we just don't know how best to make it happen."

The former Christie administration launched NHI just prior to the May 2017 general election, with all financing sourced from the Consolidated Fund - the central pot of money into which all the Government's major tax revenues go.

The scheme started with $100m for primary care, and another $20m for catastrophic care for life-threatening illnesses, but the Minnis administration argued that its predecessor failed to allocate specific revenues from the Consolidated Fund towards its financing.

The prior government's plan also delayed imposing any NHI-specific funding on consumers and businesses but, given the pressure on the Public Treasury from continual $300m-plus annual deficits, the revised model proposes its own financing mechanism to ensure the scheme's viability.

"We recognise the current NHI programme is not scalable or fiscally responsible given our financial reality," the NHI consultation paper affirms. "We could raise taxes or implement new premiums and fees. This would reduce disposable incomes for Bahamians, many of whom are already stretched too thin.

"We could implement new levies or taxes on employers. This would place a burden on our businesses making them less competitive, and with small business driving the economy, this could have an enormous negative impact.

"Or we could pretend the public sector has infinite resources and be fiscally irresponsible. This would only postpone the inevitable, and fail to address the immense financial burden and patients falling through the cracks."

Dr Sands said the Government and NHI Authority had been careful not to overburden workers and employers in an already-struggling economy, and one that was still adjusting to the Budget's 12 percent VAT hike, with the proposed funding mechanism.

"We propose a plan that shares responsibility," the NHI consultation paper said. "For employers, there may still be a cost impact, but this will be tied directly to employee benefits and productivity, and not a tax that ends up in the Government treasury's Consolidated Fund. In turn, increased employee productivity and reduced sick days will result in national economic growth."

Tribune Business understands that Bahamian workers already covered by employer-sponsored medical insurance will not have to pay extra from their salaries for NHI's Standard Health Benefit (SHB) due to the way the scheme is structured (see other article HERE).

The SHB, which is NHI's minimum or base care/benefits package, is supposed to be incorporated into companies' existing group health insurance plans. As a result, the "2 percent of salary" levy - ranging from $8 to a maximum $42 per month depending on income, and capped at a $500 annual maximum - will effectively be taken from existing premium contributions.

It is unclear whether the same applies to the employer's SHB share, which will be "at least 50 percent" of the total $83 monthly premium per worker. However, it is likely that some companies may elect to drop existing medical insurance plans and just take the SHB depending on whether the NHI proposal is approved as is.

Mick Holding, the Grand Bahama Chamber of Commerce's president, last week told Tribune Business that companies such as small businesses, which wanted to provide health insurance for their employees but were unable to afford to do so, were likely to be hit hardest by the proposed NHI funding mechanism.

However, the NHI consultation paper pledges that the scheme will be phased-in to minimise any disruption and financial impact to such businesses. "It is the goal of this system that all employed people of The Bahamas will have health insurance," it added.

"However, it is also recognised that there are some employers and employees who may be disproportionately affected by this programme." As a result, the proposed NHI model excludes part-time employees who work less than 15 hours per week from inclusion in employer-sponsored health plans.

NHI's first phase roll-out also carves out companies that either employ less than 100 persons or have under $100,000 in annual revenues. Employers will also not have to contribute for workers engaged on a "second" or "third" job so long as they are covered by their primary employer.

But these employers, known as "secondary employers", will still have to contribute 50 percent of the minimum employer contribution - $21 per month - to NHI's financing. "These payments are to be thought of as a contribution in lieu of providing their employees private insurance," the NHI consultation paper states.

"Upon review of the annual business licensing process, the Department of Inland Revenue will be required to validate exempt or secondary employers who have provided proof that they have made their NHI contributions."

Dr Sands said the "back and forth" in the days since the revised NHI model was released had exposed the need for further public education on the proposal. He added that "where the rubber hits the road" was the traditional desire of Bahamians to want anybody but themselves to pay for expanded public services.

"Knowing the enormity of the health challenge we have, I don't think we can afford the status quo," Dr Sands said. "We can point fingers as to why it's in the state it is in, but we're in a hell of a mess, and if we're going to reverse some of these trends we're going to have invest significantly in restorative health maintenance and the like.

"The truth of the matter is people are very angry at how expensive it is to fix renal failure, deal with heart disease of cancer. Some of the newer cancer therapies cost $1m, certain heart operations $500,000, and dialysis $80,000-$90,000 a year.

"We have hundreds of Bahamians walking that road, all the chronic NCDs, and we have just now looked at the Bahamian experience," Dr Sands continued. "We have 90,000 diabetes patients in the country, which puts us as the highest in the world.

"This means that because we have the worst health profile in the world, and got here because of our own poor choices, we have to pay for it. We can resent the fact we have one of the highest HIV rates in the world, but that is not going to change the fact we do. It is what it is.

"We don't want to discuss the problem. We created the problem, created the mess, and want someone to fix it painlessly and without sacrifice. It doesn't work that way. You can shoot the messenger, but that does not mean the message is not true."